Group Five recently announced a key milestone in its history. After an extended negotiation period and a lot of hard work, its Intertoll business has entered into a landmark co-operation agreement with one of the largest asset managers in the world.
This transaction will see the company jointly pursuing significant new brownfield and greenfield road private public partnership (PPP) infrastructure investment and operating projects throughout Europe, Turkey and North America.
The agreement involves Intertoll Europe and Aberdeen Infrastructure Funds (AIF) establishing a new company, Intertoll Capital Partners BV, as the investment vehicle to implement this strategic initiative. Intertoll will hold 50.01% and AIF 49.99%.
This means that Intertoll will sell 49.99% of our current underlying European PPP infrastructure investment portfolio to AIF for EUR43,0 million (R633,2 million) in cash. Intertoll will continue to perform 100% of our operations and maintenance role on all current and future projects.
This is a significant milestone for the group in its articulated strategy of value creation in their Investments & Concessions cluster. It signifies a step-change in the growth of Intertoll through partnering with a highly credible global infrastructure investor to take advantage of road project investment opportunities and for Intertoll to operate these assets.
This strategic partnership allows Group Five to entrench its position in the road operation and maintenance market and offers them access to a wider range of opportunities in a way they would not have been able to achieve on their own.
“As a group we can feel extremely proud to form this partnership with one of the world’s leading investment institutions”, says Eric Vemer, Group Five’s CEO. AIF is the infrastructure investment unit of Aberdeen Asset Management Plc (“Aberdeen”, web: www.aberdeen-asset.com), one of the world’s largest asset managers.
They operate from a network of 38 offices and investment centers in 25 countries across the globe, with £301 billion (R5.2 trillion) of assets under management across several asset classes, including equities, fixed income, property, infrastructure and private equity. AIF is one of the largest investors in essential economic and social infrastructure projects underpinned
by long-term government contracts in Europe, the United States of America and Australia.
This strategic alliance further improves Group Five’s ability to participate in the development, investment, operations and maintenance of global concession assets. Intertoll and AIF share a long-term approach to creating value for road infrastructure projects and both companies were recently successful in concluding and acquiring the M6 Duna project in Hungary together.
Intertoll Europe will retain our full operations and maintenance (O&M) role on all its current contracts, while the partnership will enhance prospects to secure new projects. Proceeds from the transaction will enable Group Five to co-invest alongside AIF at a level appropriate to its capital base, whilst allowing them to leverage the scale and support of Aberdeen to drive Intertoll’s growth in O&M operations.
Following the successful execution of the transaction, Group Five will focus on acquiring further equity investments in similar concession assets across select markets. They aim to secure any operations and maintenance roles corresponding to such new investment assets for the group to deliver on its strategy of growing their operations and maintenance order book and annuity income.
The new partners are equally upbeat about this partnership; with the Head of Infrastructure at Aberdeen expressing to Group Five that they were particularly impressed with the expertise and track record of their Intertoll team and the clearly-articulated growth strategy which matches Aberdeen’s aspirations to secure long term stable income and provide high quality low risk returns and yield to investors.
Over the next few months both Group Five and AIF will work on finalising required regulatory approvals to implement the transaction, which are expected to be met at the latest by 30 June 2017.